NYC Property Tax Classes & Assessment Caps

N.Y. Real Property Tax Law Art. 18 §§ 1801-1806 (esp. § 1802 classification, § 1805 assessment increase caps)

Under NY Real Property Tax Law Article 18 (applicable to "special assessing units" of 1,000,000+ population, i.e. NYC), § 1802 divides all real property into four tax classes: Class 1 (one-to-three-family homes and small/low-rise residential condos), Class 2 (other residential including co-ops, condos and rentals, excluding hotels/motels), Class 3 (utility property), and Class 4 (all other commercial/industrial property), with class shares and proportions governed by §§ 1803-1803-B. Under § 1805, the taxable assessed value of an individual Class 1 parcel cannot increase more than 6% in any year or 20% over any five-year period, while Class 2 parcels with fewer than eleven residential units are capped at 8% per year and 30% over five years (physical-improvement increases are excluded from the caps). The NYC Department of Finance sets assessed values annually on the tentative and final assessment rolls.